OK welcome back to Gary's Economics

today we are going to predict the UK budget

two and a half months in advance

OK so, I was going to do a video this week about how to

convince your friends we need wealth taxes

but I'm gonna push that back to next week

because something has happened in the last one week

two weeks that I think is sufficiently important

that we need to talk about it now

so that we can get ahead of it

in advance of the UK budget. Alright

so for those of you who don't know

the UK budget comes once a year

it's normally about the end of October

so it's not gonna happen for another two and a half

three months. When it happens

there's always a stupid media sh*t show

and we always have argument here where I say

I'm not covering the budget

because it's a waste of time

nothing important happens

but this year I think something very

very interesting is going to happen in the UK budget

and I think it's important we get ahead of it.

If you are watching not from the UK

this is going to be very very relevant for you as well

because what is happening in the UK budget

is a good way of understanding

a massive thing that is happening

not just in the UK

but in every country in the western world

and what is happening here will happen in your country

very very soon.

OK so as you know

one of the big goals of Gary's Economics summer

autumn season 2025 is I'm trying to infiltrate

elite UK institutions because I think we're gonna need

some level of support from elite institutions

in order to get the wealth taxes that we need

so in the last month really

but especially the last two weeks

I've been cycling all around Westminster

meeting lots and lots of different people

trying to see whether we can get

support for wealth taxes

trying to understand what we need and in doing so

I have learned

a little bit about what is gonna happen in the UK

budget. Now usually when I was a trader

I always found it interesting how the UK budgets were

often really

not particularly market relevant

they didn't really move the markets

and what that means in my opinion

is basically nothing very important happens

and policy very rarely changes in the budget

but we, I think

are gonna see some really interesting things

in the budget this year and the big topline picture is

that there are going to be significant

increases on taxation of the middle class

and when I say the middle class

I mean that in the British sense which

confusingly is kind of the top 20% but not the top 1%.

Now this is very interesting

because the UK

Labour government

came into power on a very strong promise

that we are not going to raise any taxes and yet now

just one year into that government

it looks like we are probably gonna get a significant

increase in taxes which will probably be extremely

politically disastrous

for this already very unpopular government

so why is this government that is already very unpopular

and promised not to raise taxes

going to raise taxes on the middle class?

OK so what we are gonna do here is we're gonna do

basically a description of what it means to

run your wealth down, you overspend your income

such that your wealth deteriorates

which is

basically what the governments have been doing in

the UK, the US, really all across the western world

especially since the 80s

and I want you to understand how

that provides the context

of how you reach a point where the government

basically has no choice

but to sort of go for certain groups in society

and we're gonna

use that through the example of an individual person

which is maybe not the perfect example

but I think it does does describe what's happening

and it's important context

why the government is doing what it's doing now

okay so let's say

like the government in the post war period

you start off with a lot of wealth

so let's say £1 million

if you have a million pounds of wealth

you're gonna get some income from that wealth

so you normally make about 5%

so if you have a million pounds of wealth

then you're gonna make something like 50k

£50,000 a year in your wealth income

your passive income from your wealth.

Government also has like its income from taxation

which the equivalent for a person is a work income

let's make that 50k as well

to keep things nice and simple

so you got good income 50k a year wealth income 50k

work income 50k but your policy is to

you're gonna run this wealth down

you're gonna spend more than your income

so instead of spending 100k

which is your income you're gonna spend 200k

bit more there right so spending more

and then obviously

the consequence of spending more than your income

is that your wealth goes down

so next year you have only 900k

wealth less than a million

and obviously because your wealth is less now

your passive income from wealth is now less

so instead of making 50k

you're gonna make only 45k

your work income is the same

I'm gonna drop these pound signs

to make it a bit clearer

you should be a bit worried

cause your income's less now

you're intentionally planning to run this wealth down

so let's run it down a bit more

and you're gonna keep spending 200k

what happens then is of course that

your wealth falls again

and because your income is less

now your wealth falls not just by 100k

but 105k so now you go down to 795k

and your wealth income falls even further

this now falls another 5k plus a little bit more

so this drops it is 39.75k

this stays the same your spelling stays the same

cause you keep running it down

and next year this falls

see this fall was 105 this fall was just 100

this fall is 105

and now you're gonna fall just over 110

it's like 110 point something

and it's gonna drop down to

684 point something

and what you should see is that the wealth

wealth is not only falling over time

but the speed of the wealth fall is falling

so your wealth is falling in an accelerated way

which is kind of worrying

you can keep running this down

and eventually you'll hit zero

once your wealth hits zero

which we kind of hit

we were in this kind of period after 2008

before the Covid crisis now your wealth income is zero

your work your work income is 50

but it's hard now right

because you're used to spending 200 a year

and especially we hit this point in Covid

where even though our wealth,

the government wealth had fallen to effectively zero

we had to keep spending because of Covid

we used to spending 200 a year

so we actually kept spending

and in fact

during Covid we we we started to spend even more

but we started to overspend even with no wealth left

and we started to run into debt

which means after Covid

you're in a kind of situation where your wealth

goes down as far as say minus 500 in this example

then your wealth income can become negative

like not only do you have no wealth

but you have to pay interest on your debt to the rich

so now this is minus 25

your working income is still 50

but you wanna spend 200 but eventually

the people who are lending you this money

which is rich people

they start seeing what if this keeps going down

we're not getting any real wealth anymore

all we're getting is debt interest

eventually if we keep lending these guys money

they're not gonna be able to pay it back

eventually you hit this floor where the gov....

where the rich refuse to keep lending you this money

and suddenly you cannot do this anymore

you cannot overspend your income

because you have no more wealth to sell

you're not allowed to borrow any more money

so you suddenly have to bring this into balance

which means now the max you can spend is 50, -25

which is 25

so you have to suddenly aggressively drop your spending

now obviously

this is a, you know,

a stylised example to exaggerate what is happening

but what I wanna point out here is that

this naivety to

the aggressive falls in government wealth

leads to a situation where obviously inevitably

eventually you will run out of wealth

and you will have to aggressively reduce your spending

and you know this is true not just of governments

this is also true what's happened to the working class

you know

it's obvious to be reminded of what happened during

for example the the sale of the council houses

if you sell your assets

and those assets are not accumulated by the public

but are accumulated by the rich

you will eventually hit a point

where you have to aggressively reduce your spending

and when that happens, what are you gonna do?

You have a number of options

and we will talk about those options now.

So now, let's get like a fresh sheet

so now we wanna talk about like

what the government can do

and for a long time

the government was basically funding its spending

by borrowing more or selling assets

in either cases you're running your wealth down

now the UK

government has hit the point

where this is not an option

and other governments

in the western world will hit this point

very soon

that leaves you with basically four things you can do

No. 1

and the thing which we constantly campaign for is

tax the rich. Don't tax the workers, tax the super rich

these are the guys who have the assets now

these are the guys who have the government wealth now

these are the guys who have the working class wealth

now and are getting the middle class wealth

this is what I constantly campaign for

you should tax the rich

but our government most western governments

are extremely reluctant to do it

so what other options do you have?

No. 2 is you tax the poor

now for a long time after World War 2

ordinary people the working class people

poorer people did have some wealth

but that's gone now

there's no way you can tax these guys more

there's nothing to take you know

you cannot like tax an empty bucket

no wealth here that's not possible

number three is you can try to slash the welfare state

obviously here in the UK we had 14 years of a

what is called austerity, conservative austerity.

If you're watching from the US

you're moving into your slash the welfare state period now

it doesn't feel great for the poor

but there's a degree to which you can do it.

We've already done it loads in the UK

the UK government, the Labour government now

tried to do that earlier this year

they wanted to slash spending on disabled people

and their own politicians basically blocked it

which means now Labour does not have this option

which means you are left with only one possible option

other than tax the rich

which is to tax the middle class

and when I say the middle class

I mean it in the UK sense

which is basically higher earning workers

or non super rich asset owners

and if you watch our video

the squeeze out you will see that

that this is basically what happens

If you allow these wealthy people to rapidly grow

their share of the pie, first the poor lose their assets

then the government lose their assets

and the welfare state goes

and then you are left finally

with this choice that our UK government has now

your government will have very soon

which is you only have two options

do you tax the rich? Or do you tax the middle class?

and I'm here campaigning for tax the rich

but the truth is

most governments at the moment

seem to feel like

their only option is to tax the middle class

so that is what you are you will get

that is what we will get in October

and that is what you will get in your country

very soon.

This is a very important moment for you

and for the country okay

billionaire owned media

will try to portray this taxing of the middle class

of richer people

as a battle between the middle class and the poor

they do not want you to realize that

the reason the middle class are being taxed

is because the government is aggressively

stubbornly and stupidly unwilling to tax the rich

a battle is going to continue here

which has been going on already for a long time

which is that

the poor and the working class are being bankrupted

the welfare state is being shut down

in the absence of taxation of the rich

the middle class will inevitably be eaten next

you cannot have an aggressively

expanding wealth of the very rich

in economies that are not growing quickly

without gradually displacing every single

other section of society including the middle class.

If you do not get systems in place

such that you can tax the very rich

whilst their wealth is aggressively growing

every single group of society

including the middle class

will be destroyed.

But what the rich want to do

is to separate out the middle class

so that the middle class

form an alliance with the rich

and think that

if we simply support and stand by the rich

for long enough we will be protected

whilst all of the pain will be felt by the poor.

That is not going to happen

if the middle class

do not form an alliance with the poor

they will be eaten by the rich

simply basically

by the virtue of maths and compound interest.

The poor have been f**ked for a long time

the government is being destroyed next

the government has nothing left now

there is only two options available now

either you tax the rich

or you allow the rich to eat the middle class

I'm here speaking now to the middle class of Britain

to the middle class

of countries across the western world

what choice do you want?

Whose side are you going to be on?

Are you going to support the rich

who will outcompete you and your kids

for the things that you need

for housing for financial security

or are you going to stand with the working classes

of your countries

to protect the wealth that your grandparents

and your great grandparents fought so hard to get

for the ordinary people of the UK

and the country in which you live.

You're gonna hear a lot about this in October

I'm telling you right here

right now, October

is going to be another big step in a class warfare

that has been going on for a long time

and the people who are winning are the very

very rich. Their wealth share is aggressively

aggressively aggressively expanding

that is what is making it impossible

for ordinary people

like you and your kids and your grandkids

to own property

they are going to try to portray this as a battle

between the middle class and the working classes

between the middle class and the poor.

If you accept that battle

then you will ally with the exact people

who are going to take away the wealth that you need.

Go back and watch the video

‘The Squeeze Out’, because everything

that I said would happen in ‘The Squeeze Out’

is what is about to happen in October.

Listen, there's only a certain amount of resources

in this country

there's only a certain amount of resources

in this world. If you allow this super

super rich to grow and grow and grow and grow

their resources you will lose your share.

What I wanna make clear is

I think that what I do on this channel

is very often mischaracterized

largely by billionaires and by billionaire owned media

or billionaire owned bot farms in Russia

When I say tax the rich. When I say tax wealth not work

I am doing that not just to protect working people

but also to protect the middle class.

They constantly say

what Gary wants is to tax high earning working people

despite the fact that I constantly aggressively

very clearly say I am trying to tax the very rich

the wealth hoarders

the asset hoarders to protect working people

including high earning working people.

If you are a high earning working person

if you are a working person who has a very powerful job

you have influence in something like government

politics, media

think tanks, academia

I want you to look very hard at the situation you're in

right now. What are you gonna do?

Are you gonna stand by me

the person who says tax wealth not work

or are you gonna stand by the billionaire media

that is gonna raise your taxes and take your wealth.

Alright so that's it

that's the budget two and a half months in advance

it is gonna be another step forward in a class warfare

which is rapidly progressing.

Listen, there's gonna be a battle here

the rich are winning, the rich are winning really

really really aggressively.

For a long time

the middle class have been relatively protected.

That's gonna change now

the middle class are gonna start to get hit

because you're the only guys left that have any wealth

in a situation where the rich need to take more

and more and more and more and more

What are you gonna do?

What are the middle class gonna do?

Are they gonna stand with the poor,

with the working class, who have already been impoverished

to protect themselves from the rich

who are taking everybody's assets

or are they gonna allow themselves to be divided

in which case the rich will take everything

including the houses your kids need.

Listen, we're gonna fight against it

we're gonna try to protect the ordinary

working people from the super rich.

Protect your wealth, protect your kids

protect your families, protect your future

Watch the videos, understand the videos

send them around, send them to your friends

your colleagues, your family

your mum, support the channel

support the Patreon. Tax wealth not work